For all Arizona's efforts at attracting manufacturing, the state still isn't wowing the business world, at least according to one Indiana-based assessment.

Conexus Indiana, a pro-manufacturing organization that supports business in that state, again gave Arizona a "C" grade among the 50 states in its latest annual assessment of the industry nationwide. It gave Arizona a C-minus for its logistics industry.

Arizona's biggest problem is its workers, according to the Center for Business and Economic Research at Ball State University, which is in Muncie, Ind., and helped put together the report. States were judged on their relative strength in nine categories the center considered "most likely to be considered by site-selection experts for manufacturing and logistics firms."

Arizonans may take the report with a grain of salt: Indiana got an "A in manufacturing for the sixth year in a row, in the eyes of their fellow Hoosiers.

Michael Hicks, director of the center at Ball State, said Arizona improved its grade for diversification from F to D. "The state's D in human capital continues to make it a not especially attractive location for business," he said in a statement accompanying the report, which was released last week.

Arizona scored a B for its tax climate and a B-minus for worker benefit costs. It got a C for productivity and innovation. It got four D's in other categories, including human capital.

That may be especially hard to accept because of the importance of workers.

"No factor matters more to businesses than the quality and availability of labor," the report said. "Workers represent the largest single cost of doing business, but, more importantly, they are the source of most innovation and process improvements that distinguish successful firms from those that are not successful."

Perhaps the best measure of how states are faring in manufacturing is to start with the jobs picture.

Since 1990, Arizona's manufacturing employment has declined 13 percent. That sounds bad, and for those who worked in manufacturing it certainly is. But over the same span, manufacturing nationally declined 33 percent. Arizona's performance in manufacturing jobs ranked 15th best in that time. Indiana, by the way, ranked 19th with 17 percent losses.

Since the Great Recession began in late 2007, however, Indiana preserved more of its manufacturing jobs than Arizona has. Indiana lost 7.7 percent of its jobs, while Arizona lost 13.5 percent. The nation lost 12 percent in that time.

Arizona's manufacturing decline is partly due to the cutbacks in defense spending by the federal government. Last year the state landed a supplier for computer-maker Apple, which serves as a high-profile victory for the state, even if it doesn't offset the other losses. Arizona is also in the running for a battery factory for automaker Tesla, a project believed to be the largest of its kind nationally in years.